The Act also fully devolves the power to raise taxes on land transactions and on waste disposal to landfill – it is expected that this will take effect in April 2015, at which point the existing Stamp Duty Land Tax and Landfill Tax will not apply in Scotland and will be replaced with Land and Buildings Transaction Tax and Scottish Landfill Tax.
The act also provides powers for new taxes to be created in Scotland and for additional taxes to be devolved.
For employees and pensioners, the Income Tax change will be applied through PAYE (Pay As You Earn). HMRC will issue tax codes to employers in the months before April 2016 which will identify those employees who are Scottish taxpayers, and employers will deduct tax at the appropriate rates, which may be higher or lower than or the same as those which apply in the rest of the UK.
The definition of a Scottish taxpayer is based on the location of an individual’s main place of residence – further guidance will be available in due course.
CIPP comment As part of the Stakeholder Group the CIPP policy team continue to be looking at the implementation detail of the Scottish Rate of Income Tax. The next meeting is due to be held in February where, amongst other issues, we will be discussing further HMRC’s requirement that employers show the Scottish rate separately on the P60. HM Government has also just published a message to stakeholders announcing that draft legislation will be published by Burns Night (25 January) which we will publish when available. The full message can be read through the link below – an excerpt says, “Since the publication of the Smith Commission report , the UK Government has engaged a wide range of sectors as part of the process of turning the Smith Commission Agreement into draft clauses, including the Stakeholder Group established by the Secretary of State for Scotland to inform the preparation of the draft legislation.”
See our November news item for further detail on the Smith Commission recommendations.
Draft legislation on further devolution for Scotland
23 January 2015
The UK Government has published a command paper with draft clauses on further devolution for Scotland.
In September 2014, the people of Scotland voted to remain part of a United Kingdom with a united future and the Prime Minister invited Lord Smith of Kelvin to oversee and deliver cross-party agreement on the shape of improved and enhanced devolution for Scotland. On 27 November 2014 Lord Smith delivered an agreement reached unanimously between all five main Scottish political parties on more powers for the Scottish Parliament. This is the first time all five have participated in a devolution process. The draft clauses published in this command paper are the next stage in delivering that commitment and this draft legislation shows how the measures included in the Agreement would look in law. There isn’t enough time before the next UK General election for this Government to take a new Scotland Bill through Parliament. However producing these draft clauses now means that whoever forms a government after the election in May 2015 will be able to turn them into law at the earliest possible opportunity.
CIPP Policy News Journal
08/04/2015, Page 460 of 521
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